Malaysian capital controls

[Chris Burford]

At 16:35 24/02/01 -0500, you wrote:
><http://papers.nber.org/papers/W8142>
>
>Did the Malaysian Capital Controls Work?
>Ethan Kaplan, Dani Rodrik
>
>NBER Working Paper No. W8142
>Issued in February 2001
>
>Malaysia recovered from the Asian financial crisis swiftly after the 
>imposition of capital controls in September 1998. The fact that Korea and 
>Thailand recovered in parallel has been interpreted as suggesting that 
>capital controls did not play a significant role in facilitating 
>Malaysia's rebound. However, the financial crisis was deepening in 
>Malaysia in the summer of 1998, while it had significantly eased up in 
>Korea and Thailand. We employ a time-shifted differences-in- differences 
>technique to exploit the differences in the timing of the crises. Compared 
>to IMF programs, we find that the Malaysian policies produced faster 
>economic recovery, smaller declines in employment and real wages, and more 
>rapid turnaround in the stock market.

I thought Thailand's recovery was based on the very severe destruction of 
capital during the financial crisis, which is one way of overcoming a 
crisis under capitalism.

In the case of Malaysia and Kong Kong, through preserving capital within 
their own boundaries, they avoided the worst of the destruction of capital, 
and still recovered.

It was a victory over sado-monetarism.

Chris Burford

London